By Kellen Olshefski
In his annual State of the County Address on May 17, County Administrator David Bretl highlighted several factors that have impacted the county in recent years as well as what the future might bring.
Bretl noted at the beginning of his address that though the economic condition in Walworth County might have seemed dismal in past years, things are beginning to turn around.
“It’s really on an upswing here, much to the credit of my agenda and also all the hard work of all the directors and members,” he said. “There’s signs of light or that perhaps things are getting a little bit better.”
Bretl explained the county is once again anticipating a virtual freeze in the tax levy both because he feels the county is in a position to do it, and also because it really doesn’t have an option due to the state levy cap.
With a 7.59 percent tax levy increase in 2002, which Bretl explained was not uncommon at all ten, twelve years ago, the county has rationed it down from historic levels to a zero percent increase in 2012.
“The county really did that themselves before there was any legitimate levy cap, in 2004, when they adopted their own, self-imposed, tax levy cap, and really have, to their credit, followed that philosophy through and in fact, I think that was a real turning point in being able to deal with some of the state levy freeze that we have right now…putting them in the mindset and getting the county structured to be able to sustain itself with lower tax levy increases,” he said.
Bretl noted Walworth County sales tax history as being a positive outlook for the county.
With a large drop in revenue from the county sales tax in 2008, approximately $1 million, Bretl explained it reflected what people were spending and what their ability to spend was. However, he noted the trend is improving.
“We saw a little upturn with ‘Cash for Clunkers.’ When that came out we saw sales tax go up, but it does appear to be trending up, certainly not at the pre-2008 level, but we’re seeing month after month of it beating our projections,” he said.
“So I’m calling that one as turning around, which I think is good news.”
Though statistics for real estate activity based on Register of Deeds Real Estate Documents are not projected to improve in 2013 after a dramatic slowdown since 2003, Bretl said that, too, is beginning to turn around and is going to “maybe be on the upswing again.”
Also on a positive note, Bretl noted that foreclosures appear to be slowing down according to 2012 data from the Walworth County Sheriff’s Department and that 2011 might have been “a high water mark.”
Along with the current conditions of the county, Bretl took time to reflect on and evaluate how the county has dealt with aspects of Wisconsin Act 10 including employee pension contribution, compensation, insurance and grandfathering.
Bretl explained Act 10 was essentially a set of tools for governments to use to achieve a tax levy freeze. The tools were sweeping revisions to the collective bargaining laws and mandatory pension contribution by most employees.
Bretl explained there are two approaches to Act 10: either to fight it, or to use it.
“I think the county, and we’ve never had a policy statement on this I guess, but I think our approach in general has been that we’ve tried to use these Act 10 tools in order to achieve that levy freeze,” he said.
According to Bretl, historically, pension contribution was set up where the employer would pay a share and the employee would pay a share. However, what happened over time, through collective bargaining and extensions of this by municipal employers, the employer would end up paying the full share into the pension.
In general, Act 10 made it unlawful for the employer to pay the employee share, according to Bretl.
“So what’s the work-around to that? Give everybody a raise,” Bretl said. “That was a pet peeve of mine without any reference to whether or not our pay was in line with the private sector or whether or not we were paying more than we should, the simplest course was just to say how about a two percent, across the board pay raise.
“I kind of looked at that as the first law of holes; when you’re in one, quit digging,” Bretl said. “We didn’t take an across the board pay increase in 2012, just so we could stand down and look at what we were paying folks.”
Another important aspect, Bretl explained, is the idea of grandfathering, which he said means different things to different people.
“One of my favorite law school professors I had, John Kidwell, taught contracts, and he was always very dramatic, to talk about partial performance, you tell somebody, ‘go swim across that lake and I’ll pay you $1,000,’” he said.
“And they swim and they’re about 80 percent of the way and you yell, ‘I revoke,’ and hollering ‘I revoke,’ has certain moral and legal implications. That’s part of what’s going on with grandfathering.
“You look at the employee who was maybe hired in 1988, and jumped in the lake and started to swim, you have to be a little bit careful before you say ‘I revoke,’ and some of those issues are retiree health insurance for example, a benefit they were promised when they were hired.”
Bretl explained that some, however, view grandfathering in a much more expansive view, believing that since they were hired into a system where they received annual step increases and across the board increases in pay, it should continue until retirement, something he said he wouldn’t support.
“Everybody’s free to leave and look for different employment,” he explained. “But I would contrast that with someone who was promised health insurance after 20 years of work and is in year 17…I think it’s dirty pool personally to pull that rug out.”
Finally, Bretl touched on the effects Act 10 has had on management practices at Walworth County. He explained that the county needs to retrain its managers to manage, including himself, because it’s “a brand new environment.”
Bretl explained whereas in the past, union contracts were specific and answered almost all questions. However, without union contracts, managers are forced to make decisions that may lead to uncomfortable or difficult conversations rather than be able to pass the blame onto the contract.
Other notes of interest for future issues Bretl pointed out include stabilizing full-time employees, which has led to reductions in tax levy increases, and also the county’s declining debt service which has dropped from its peak of $52 million in 2008 to $30 million in 2012 and is projected to fall to somewhere around $25 million in 2013.
“I think we have a lot of strengths in county government, but we also have a number of threats that we have to look at and that’s at least given us a starting point for some of that longer-term planning,” he said.